Smart salespeople can differentiate between good customers and mediocre ones. They study the subtle differences and focus on looking for those who fit that “ideal” profile. What about the bad customers?
They fire them.
Yes, successful salespeople know that the time, energy, and effort wasted on “net loss” customers can adversely affect their opportunity costs-the relationship between scarcity and choice. Smart salespeople choose whom they will sell to.
They profile their existing customers and categorize them into three basic groups-Ideal, Acceptable, and Poor. They use demographic info (company size, revenue, etc.) and psychographic info (IAO variables-interests, attitudes, and opinions) to categorize them.
Here are traits in each category to help you identify your best customers (buyer types to pursue) and your worst customers (buyer types to avoid).
1. Ideal Customer
These customers meet most or all of the ideal traits you’ve defined.
Your highest success rate comes from selling to a fully qualified buyer who fits your ideal customer profile. These customers should be the ones who value your solution, buy from you over and over again, and tell others about you. Smart salespeople pursue these buyers most often and avoid those who do not fit this profile.
- Buy value
- Pay premium price and on time
- Buy consistently or exclusively
- Buy all of your products or services with upgrades
- Pay for your advisement or expertise
- Promote you to their network
- Desire partnership and value you as part of their team
- Make excellent case studies
- Provide glowing testimonials
Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them. –W. Edwards Deming
2. Acceptable Customer
These customers meet some of the ideal traits you’ve defined.
These buyers may be smaller accounts that buy intermittently or larger accounts that reduce your margins. These can be good customers, but the gains are not as strong as with ideal customers who fuel your business growth.
- Buy somewhere between value and price
- Negotiate for discounts
- Buy somewhat regularly
- Request favors occasionally thrown in such as free advisement or free advice
- Moderate willingness to provide testimonials
- Rarely buy all of your products or only buy standard with no upgrades
“Quality in a service or product is not what you put into it. It is what the customer gets out of it.” – Peter Drucker
3. Poor Customer
These customers meet few or none of the ideal traits you’ve defined.
These buyers cost you money and time and erode company morale. They drain your team and your resources. Salespeople sometimes see these customers as low hanging fruit. In other words, they appear to be easy sales requiring less effort. Not the case. These buyers will distract you from selling and servicing your ideal customers.
- Excessive demands and complaints
- Infrequent purchases
- Buy on price only
- Value is irrelevant
- Negotiate you down to breakeven point or you lose margin
- Slow to pay
- Expect your advisement or expertise for free
- Waste your time
“How you think about your customer influences how you respond to them.” – Marilyn Suttle
What does your customer list look like now? Once you’ve defined your ideal customer profile, focus your sales efforts on filtering your prospects so that you pursue the highest probability customers with the greatest mutual benefit. Just like smart salespeople, you’ll reap the rewards!